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Your Bottom Line

News/Business. Christine Romans. Financial advice. New.

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mpeg2video

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Us 4, New York 4, Bing 3, Motrin 3, Google 3, Stephen Moore 3, Zanny Beddoes 2, Ibm 2, Christine 2, Chicago 2, America 2, Bubbles 2, Stephen 1, Christine Romans 1, Dan Grossman 1, Steven Moore 1, Rutgers University 1, Januaet Yellin 1, Siemens 1, Kyocera 1,
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  CNN    Your Bottom Line    News/Business. Christine  
   Romans. Financial advice. New.  

    February 16, 2013
    9:30 - 10:00am EST  

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thanks for watching this morning. i'll see you back here at the top of the hour. "your bottom line" starts right now. thank you, susan and victor. we'll see you at the top of the hour. we know what we've recovered from. the minimum wage economy, is that what we're recovering to? good morning, i'm christine romans. 28 months in a row, 6.1 million jobs created in the past three years, but the jobs we're adding are not the same quality as the jobs we lost. survey from rutgers university finds 60% of people who found work in six months settled for lower pay. these aren't jobs you can send a kid to college on or buy a house. president obama detailed his blueprint for boosting the middle class. the only new proposal was an old one, raising the minimum wage. >> let's declare that in the wealthiest nation on earth, no one who works full time should have to live in poverty and raise the federal minimum wage to $9 an hour.
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>> free action was swift and fierce. conservatives say, hey, that's a jobs killer. progressives say it lifts families out of poverty. the problem, you can't find studies to support just about any position. a study found the new minimum wage actually means fewer jobs for low-skilled workers but a study by alan krueger concludes minl mihm wage hikes dewpoint reduce employment for fast food workers in new jersey. a study from the chicago fed found every $1 rise in the the minimum wage increases household spending by $2,800 over the following year. but just this week, januaet yellin, the vice chair of the federal reserve said raising the minimum wage doesn't fix the problem, stagnant spending by households and businesses. >> i would say that it's not something that would make up for
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the shortage of demand that we have in the economy. >> zrv actives like steven moore, says the president is about to kill more jobs. >> i taught economics. if any of my students ever said that we should raise the minimum wage, i would probably flunk them. i think this is a terrible policy. what you're doing by raising the minimum wage, christine, you're sawing off the low-wage jobs that are starter jobs that get people in the economy and the job market in the first place. i spent the last couple of days talking to a lot of fast food restaurant owners to people who run hotels and so on. christine, they're telling me we're operating on very thin margins right now. if they raise this minimum wage, we are going to have to lay off workers. i think it's going to hurt the economy with respect to more unemployment. look, if a worker isn't worth $9 an hour, what you're basically
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saying is that they can't work because no employer can afford to hire them. >> i want to bring in daniel gross from the daily beast. as stephen was saying. most of them we talked to say they hate the dedae of raising the minimum wage. listen to a few of them. >> of course, it's horrible. the way it's going to affect everybody. i'm going to have to lay poem off out of my own company. i'm sure every local business owner is probably going to have to do the same thing also. >> i just won't be able to have employees. i just won't. >> everybody wants to make more mon money, obviously. at the same time, the small businesses are suffering. >> are they wrong? >> well, it will affect them immediately, but businesses since 1938, when we put the first minimum wage law have said you do this, set this standard, it will destroy jobs, destroy the economy. we are far richer and have far more jobs than we had in 1938 and in every year since we've raised the minimum wage. i believe in high standards. we set standards for things like pollution control, mileage, worker safety, time. >> and those t middle class families.
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it may not be flowing into the poorest americans. is the middle wage, is it what we can do to create good middle class jobs or is it a distraction from the fact we're not creating good middle class jobs? >> you know, i think i'm somewhere in the middle between your two previous guests. i think you should not exaggerate the job-killing impact of a responsibly set minimum wage. the conventional wisdom in the
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economics profession has shifted quite substantially over the last 10, 15 years. minimum wage, provided it's not too high, is not disastrous and can have some beneficial effects without impacting employment too much. that said, it would not be top of my list of what to do to boost quality in this country and improve prospects for people at the bottom. something else that the president mentioned in his state of the union is much, much more important, which is preschool for 4-year-olds, universal preschool. those kinds of things are much, much more important than minimum wage. >> tell me why that helps the poor and people in poverty maybe more than raising the minimum wage. >> what really matters is giving people the skills and the education, which they need to do the kinds of jobs we're going to have in the future, which will require more skills than many of the ones we've had in the past. that's why i think you need to start early on. this country pioneered secondary education, pioneered college education. it's falling back behind other countries in preschool. and i think that's the kind of
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new frontier. particularly if you look at the sort of gap between the 1% and the rest, the gap between the top and the bottom. the minimum wage can help, if done responsibly. much more important is to invest in people at the bottom. that's why universal preschool really helps. >> there's k through 12 in this country. we think there should be crawl through 12. other country that is do this have very high taxes. we're not in the situation where people want to pay for something new at the moment. don't move. coming up, our bubbles -- yes, bubbles. the key to this slow and steady recovery, are the feigns here to stay or are you at risk of the next bubble bursting? like an available heads-up display on the 2013 lexus gs. there's no going back. i have to know the weather patterns. i upgraded to the new sprint direct connect. so i can get three times the coverage.
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a bubble that burst or worrying about another forming. just like youth, no bubble lasts forever. and when economic bubbles get ready to pop it's like charlie and the chocolate factory. >> i'm a bird! >> i'm a plane! >> i'm going too high! >> the next bubble could be forming right where they already burst. home prices are rising. amazing, right? numbers aside, do you feel any ri richer in your home? and what is tech trying to tell us? google stock is near all-time highs. apple has lost a third of its value. demand for gadgets is strong. overall business demand is slow. there are tiny bubbles, cue don ho ♪ tiny bubbles
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tiny bubbles ♪ >> and giant bubbles. think tulips. some of you think this chart screams bubble. others say not so fast. stocks are historically cheap right now. no denying money has ever been cheaper. look at the interest on your checking account. that's a bubble, too, because this guy is keeping interest rates so low, which makes us wonder in rescuing america from a crash, is he creating the next bubble to burst? stephen moore, dan grossman and zanny beddoes. you wrote a book "pop: why bubbles are great for the economy." >> this is how we create new infrastructure, telegraph, railroad, internet. we don't sit around and the government says build this line from here to here, people run around and go nuts and build four railroad lines and four telegraph lines and they all go
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bankrupt. but then someone picks up the pieces, takes that infrastructure and does something with it. when the infrastructure companies went bust, we built the web 2.0 on top of that. when we're not developing any new way of building housing, the benefits are much less. >> is the fed creating bubble? >> i think there is a certain excess in, i would say, corporate debt. consumers have done a great job deleveraging. they've learned their lesson. but companies are able to issue debt. good companies and bad companies, at very low interest rates and they're doing an awful lot of it. >> stephen moore, conservatives tell me sometimes they're very concerned about all the money the fed is printing and that they're throwing out the window into the economy. >> right. >> and we are sosowing the seed of the next bubble. >> that's right. government debt, the interest rates are as low today as
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they've been any time since the great depression. in fact, the interest rate on the ten-year treasury bond in real terms is negative. i'm going to predict that we're going to see that bubble burst. people will be very sorry that they bought these ten-year treasury bills at 1.8% interest rates. that train has come to an end and you'll see rates rise which, by the way, will be very damaging to the federal government. we're the biggest debtor in the world. the other one i quickly mentioned, christine, i think there's a big bubble in higher education cost. we've come to the end of that $50,000, $60,000 cost of educating somebody for one year of college. i have two kids in college. i'm feeling it in my pocket. >> my condolences. >> i think you'll start to see college classes come down, internet courses. amen to that, by the way. >> it's interesting, zanny. in the last couple of weeks, we've seen these online classes that are considering some of them maybe you can actually get
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real credit for them. maybe that would help pop that bubble. >> yeah. maybe it would. there is a problem in higher education. we have to be careful about throwing around this term bubbles. we've gone bubbles in spotting bubbles. we went on and on about the housing bubble. i think we were one of the first to spot it, if you will, in 2004 and 2005. the definition of the bubble that makes sense is when valuations come unhinged from fundamentals and you're buying things because you expect the price to go up. there are reasons why i hope at some point long-term interest rates start to rise. talking about bubbles in government debt or bubbles in higher education at some point becomes somewhat meaningless. yes, there are issues there. yes, we need to think about them. we have to be careful about branding everything a bubble. >> you don't think the fed -- you'll agree it's unprecedented what the federal reserve is doing to keep the economy going?
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>> absolutely i think they're doing it for a reason. there's a logic behind what they're doing and it's a perfectly sensible logic. of course there's a question. will they withdraw all of this liquidity of when the time comes? will they be able to do that? before then, will you see excess valuations in certain parts of the economy? maybe you will. right now if you look at housing, i don't really see a bubble. you look at corporate stocks broadly, i don't really see a bubble. you have to understand why the medicine is being given and then, yes, we have to hope that -- >> zanny, the fed doesn't have a very good record of putting the genie back into the bottle. that's my concern. it's easy to flood the economy with cheap money. it's not that easy to pull it back. >> dan gross, stephen moore, zanny beddoes, great to see you all. have a good weekend. up next, rethinking education. students are getting a jump in the lucrative field. is the focus on jobs at this age the wrong approach? what's...that... on your head? can curlers! tomato basil, potato with bacon...
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now schools like p-tech in brock lynn, collaboration between new york public schools and city university of new york and ibm, students will graduate with a high school diploma and an associate's degree in computers or engineering. we need to give every american student opportunities like this. >> that was the state of the union address. and actually we visited that school, p-tech in brooklyn that the president is talking about. in his address actually. venture between the new york city public schools and university of new york and ibm. at the end of six years, kids will graduate with an associate's degree in computer science or engineering. this is an approach that's catching on. several schools around the
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country have been created in the model of p-tech. this is about a focus on science and engineering, on math and really fosterring this early in kids. these
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doing what they love to do, and they don't have an idea that the economy is not rewarding you for having fun on your job anymore. >> first of all, i couldn't disagree more with burt. and if here were here i would --
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i would take him down. i would kick his butt. my dad is a real conservative guy. paid for me to study acting. that's idiotic if you're thinking about the ofds success and work as an actor. i know the stats and know we need to push kids into these s.t.e.m. fields. absolutely. but passion is important. it's all i've got, by the way, passion. >> let's certainly -- yes. >> and obviously -- >> beauty and passion and -- and a sharp tongue. look, s.t.e.m. is where the jobs are. but not everyone loves science. the gender gap has widened. almost 40% of male students express interest in s.t.e.m. 14.5% of female students. how do we get kids, especially young girls, interested in the fields. even exposing them more to it because even if you're not working in those fields, those are the yields are innovating and creating the jobs. you've got to know what's going on there. >> well, i don't know if you -- and pete and i -- pete says he
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follows passion. if we're talking about the exception or the rule -- the exception is he's an exception, i'm an exception. and yoj we're the rule, we might -- i don't think we're the rule. we might represent .2% of people who can make it doing standup comedy or sports. the reality is for the general public, that's not a reality. i don't -- i mean, i can't disagree any more. >> lots of people have passion. like you said, couldn't be -- your son couldn'ting a professional supermario -- couldn't be a professional supermario player but could be a video game designer. there are so many things you can do. i think it's important to cultivate your child's passion and aspirations and aptitudes. my daughter -- you made a great point about women. i know a girl who just graduated college, got an amazing job with microsoft because she's, frankly, one of the only women out there that's got a mechanical engineering degree. my daughter loves lego's. she once said, "don't tell anybody, this is a boy thing." absolutely not. maybe she'll be a designer.
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find what your child loves and exploit -- my daughter loves to read, i buy books for her. find their passion, whatever that might be, it could be music, it might be anything. there's something for everybody. >> the only thing i worry about is the economy is changing faster than did whether we were going through all of it. the skills and education's being rewarded. it's changing quickly. i worry about looking at the world with the gen-x mentality -- >> the question is what we teach in the lower schools. are we teaching these fields, et cetera? >> nice to see you guys. come back again. >> i would like it arm wrestle with you. >> all right. the new normal may be tough for most of us, but what about the top 1% of dogs. we'll look at what it costs to be the top dog. ♪ if loving you is wrong
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claritin® doesn't start working until hour three. zyrtec®. love the air. [ male announcer ] the rhythm of life. [ whistle blowing ] where do you hear that beat? campbell's healthy request soup lets you hear it... in your heart. [ basketball bouncing ] heart healthy. great taste. mmm... [ male announcer ] sounds good. it's amazing what soup can do.
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the westminster dog show hit new york this week. what do you want? what do you want more than anything in the world? do you want the big, blue ribbon? that's what you want. you want red? no. you don't want red. you want yellow? no, you want a blue. what do you see in front of me? you see a big, blue ribbon. it's in front of you. you want it, you come and get it. you get it -- >> she's not listening to you. she's freaking out! >> that clip was from the movie -- remember "best in show"? a parody. the amount of money spent to win the real thing is no joke. >> thousands and thousands of dollars. >> an expense that i don't discuss with my husband. he doesn't have a clue. if he did, he'd about have a fit. >> priceless really. i mean, it's hard to say. i couldn't put a dollar figure on that. >> reporter: from blow dwrouts crates fit for a king, shotgun dogs get ready -- showdogs get ready for showtime.
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there's primping and advertising. >> if you advertise on one of the covers of these magazines, it's probably about $4,000. >> reporter: if you want to be a cover dog, fitness training is a must all year long. >> they're like any other athlete. he's got a rigid routine at home. he works out on the treadmill. a little bit of a special diet. vitamins. >> reporter: dog treadmills cost up to $2,000. and reece's vitamins cost more than most people's. >> his vitamin particularly is about $100 a bag. >> reporter: of course, you have to travel in style. kathleen shrunk is an owner from chicago. also a teacher. she bought an r.v. for her dog, journey, this american eskimo. >> kind of have to budget your time and your money. and where you're going to travel. i still work so i teach school. and i continue to work. so i can pay for all of my expenses. >> those are some lucky dogs. you have to wonder if it's worth it, right? tell me what you think. i want to know your thoughts on bubbles, the minimum wage, and the future of education. find us on facebook, twitter, our handle i